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vaieri [72.5K]
3 years ago
7

Using the tables above, if an investment is made now for $20,000 that will generate a cash inflow of $8,000 a year for the next

4 years, what would be the net present value (rounded to the nearest dollar) of the investment, (assuming an earnings rate of 10%)?a. $25,360 b. $5,360 c. $4,296 d. $352
Business
1 answer:
Allushta [10]3 years ago
8 0

Answer:

b. $5,360

Explanation:

Using a financial calculator with CF function, find the Net present value (NPV) of this projects cashflows;

Initial investment; CF0 = -20,000

Yr 1 cash inflow; C01 = 8,000

Yr 2 cash inflow; C02 = 8,000

Yr 3 cash inflow; C03 = 8,000

Yr 4 cash inflow; C04 = 8,000

and annual interest rate; I/Y = 10%

then compute net present value; CPT NPV = 5,358.924

Therefore, the NPV will be closest to $5,360

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All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one
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A.

The output will rise by more than it did when the previous unit was added.

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2 years ago
IRB continuing review of a greater than minimal risk approved protocol that is currently enrolling subjects must ______________-
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Answer:

Occur at least annually

Explanation:

Greater than minimal risk protocols that have been approved must undergo review at least once a year. However IRBs usually specify a shorter period than this for reviews. The principal investigator holds the duty of ensuring that signed consent forms are kept confidential. The IRB are not required to review these confidential forms.

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How do corporate bonds affect the economy
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3 years ago
How will a new law mandating an increase in required levels of automobile insurance affect the equilibrium price and equilibrium
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Equilibrium price will fall; equilibrium quantity will fall.

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The manufacturer or vendor can sell all the units they want to move and the customer can access all the units they want to buy.

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4 0
1 year ago
The next dividend payment by Grenier, Inc., will be $1.48 per share. The dividends are anticipated to maintain a growth rate of
SOVA2 [1]

Answer:

Required rate of return = 10.75%

Explanation:

<em>The value of a stock using the dividend valuation model, is the present value of the expected future dividends discounted at the required rate of return. The required rate of return is the cost of equity </em>

The model is represented below:

P = D× (1+g)/ ke- g

Ke- cost of equity, g - growth rate, p - price of the stock

This model can used to work out the cost of equity, as follows:

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Required rate of return = 10.75%

5 0
3 years ago
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